HHG shareholders to have their say on remuneration packages

27 April 2004 — 10:00pm

HHG's mainly Australian shareholders will get a chance to vote on directors and executives' pay thanks to legislation in place in the UK and also planned for Australia.

In what might represent a good test run on how such non-binding votes might work in Australia under the latest round of corporate law reforms, close to 1 million investors in the discarded former AMP UK life insurance arm will have the opportunity at June's inaugural annual meeting to cast an "advisory vote" on the nine-page remuneration report contained in the company's annual report.

While only advisory, the HHG board will "take the outcome of the vote into consideration when reviewing and settling the group's remuneration policy".

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The London and Australian-listed HHG paid chief executive Roger Yates £590,000 ($1.4 million) in 2003, though he is also entitled to a £1.1 million ($2.66 million) retention payment of which he has already received two-thirds and is payable by AMP, not HHG. HHG posted a net loss of £847 million ($2.05 billion) in 2003, including one-off losses.

AMP had a residual interest in HHG of 11 per cent prior to the recent capital raising, while about 75 per cent of HHG shares are held by Australians and New Zealanders who received their HHG shares as part of AMP's demerger late last year. Most of the rest is held by UK institutions or UK policyholders who received AMP shares during its demutualisation.

In HHG's notice of meeting released yesterday, it said shareholders would consider 16 resolutions at the June 10 meeting, to be held simultaneously in London and Australia.

The 927,000 investors will vote on the directors, the appointment and remuneration of auditors, the establishment of employee incentive plans and the authority to make political donations.

Earlier this month HHG raised £118 million in yet another capital raising to enable it to recapitalise its life arm, Pearl. HHG is using the proceeds to purchase 24 per cent of Henderson Global Investors, the wealth management arm, from Pearl, giving HHG 100 per cent direct ownership of Henderson.

This may put HHG in a better position to pay dividends, though it is not expected to this year or next, and might make it easier to be taken over, though AMP last year struggled to find buyers for the operations. HHG closed 1c lower at $1.14.